Saving money is very important these days. But do not save in the wrong place, namely on your reserves for building maintenance. If you own a house or a flat, there is no way around setting money aside. This puts you in a position to maintain your property and to refurbish it in the future. In this guide, you can read when it is best to build up reserves for building maintenance, how large they should be, and who to contact if you need a house renovation company.
What exactly are building maintenance reserves?
Anyone who owns a property, whether a house or a flat, is also responsible for its upkeep. The building should be maintained regularly. Any damage should be dealt with and repaired as quickly as possible so that the property does not lose value. If you wait too long with repairs, the cost of consequential damage can be higher than the ongoing maintenance costs. It is therefore very important to build up reserves so that the building can be repaired if damage occurs and so that renovations can be carried out.
When does it make sense to start building maintenance reserves?
The rule here is simple: the sooner, the better. Have you already found or built your dream property? Great, because from the moment you buy the property or it is completed, you should start building up reserves for its maintenance.
Why are building maintenance reserves so important?
With savings set aside, you can prevent damage to your house or flat and also preserve the value of your property. You will also be well placed to cope with larger refurbishments in the future, such as a new heating system, without taking out an additional loan or having to increase your mortgage.
How large should building maintenance reserves be?
Many owners know that they should set money aside for their property, ideally every month. But the question is how much to budget for. If you have taken out a mortgage, your bank or lender will already have carried out an affordability calculation (Tragbarkeitsrechnung). This calculation also includes ancillary costs (insurance, connection fees) and the costs of ongoing maintenance of your property. For building maintenance, banks generally assume 1% of the purchase price per year should be set aside, provided the property is new or freshly renovated. For an older property, the reserves you need to build up are higher.
If your property cost CHF 900’000, for example, you should set aside CHF 9’000 a year in reserves. That corresponds to a monthly amount of CHF 750. As a rule of thumb, around two thirds of this goes on ongoing maintenance and around one third on larger renovations. This way, you can relax and tackle even larger renovations calmly over the years.
Where is the easiest place to build up reserves?
It is best to open a separate account for your reserves. This ensures that the money saved there is actually used for building maintenance and is available when needed. You build up your maintenance reserves without stress and have money ready for larger expenses. Ideally, transfer the amount every month by standing order. The advantage is that you then do not have to increase your mortgage separately when you want to make investments. Another option is to put reserves for larger maintenance work into a pillar 3a account (Säule 3a), which pays better interest. These contributions can also be deducted from your taxable income.
Important!
For investments in your own home, you can only withdraw money from a pillar 3a account every 5 years. It is therefore worth planning and carrying out larger renovation projects together. Money from a pillar 3a account can only be withdrawn for value-increasing investments.
Condominium owners need reserves too
If you own a flat in a building with several units (Stockwerkeigentum), you also need to build up reserves for your flat. You are responsible for maintaining your own flat. In addition, as part of the owners’ association (Eigentümergemeinschaft), you share responsibility for the jointly owned parts of the building, such as the roof, the heating or a lift, if there is one. When these shared parts are repaired, you have to bear your share of the costs. Often, however, a joint fund is set up into which all co-owners pay, and the costs are then covered from it.
When should you expect larger maintenance costs?
Unfortunately, there is no general answer. Various factors come into play, such as the overall condition of the building, its age and when it was last renovated. Building maintenance mostly concerns the normal ageing of the building or its appliances.
Know the lifespan of appliances
To estimate maintenance work accurately, it can help to look into the lifespan of individual building components.
In a new building, the first major expenses fall due after about 10 years. By then, ceilings and walls usually need a fresh coat of paint.
Most household appliances also last around 15 years and then have to be replaced one by one. After 20 to 30 years, larger refurbishment work becomes necessary, and that can quickly get expensive. This is when your reserves pay off and you can draw on them. Replacing a broken heating system alone can easily cost a few thousand francs. You should keep that in mind.
Leave larger refurbishments to professionals
Is your property getting on in years, and are you facing larger refurbishment work to restore your building? For larger maintenance projects, we advise you to turn to the right professionals. We at umbaumanager.ch, the house renovation company, can offer you the complete package. With us, you get all renovations and larger conversions, such as a house extension or a complete renovation, from a single source: umbaumanager.ch. We have made it our mission to develop a digital platform that gives you full transparency and online insight into your renovation at any time. In this way, we bring you as the client together with the tradespeople responsible, and we at umbaumanager.ch coordinate the entire process of your renovation project.
Plan refurbishment work properly
If you notice that larger maintenance work will soon be needed, you should plan it carefully. Check your building regularly for damage. If you find any, act quickly and have it repaired, as consequential damage can otherwise cost you dearly. To keep refurbishment work from blowing your budget, it makes sense to plan larger renovations well. Overall management of your renovation project can also be worthwhile.
Contact the professionals at umbaumanager.ch
With umbaumanager.ch, you even have an experienced architect at your side who will not cost you a single extra centime (Rappen). We at umbaumanager.ch keep all the threads in our hands and make sure you are completely satisfied with your refurbishment work. Visit our website to get an overview of our renovation projects. You can also contact us directly by email at info@umbaumanager.ch or by phone on 044 860 37 91.
